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INNOPROM-2015: representatives of foreign companies discussed opportunities for import substitution by means of localizing production in Russia

03 June 2015

04.06.2015, Moscow.  In the light of the 6th INNOPROM-2015 International Industrial Trade Fair preparation, a joint conference 'Import Substitution and New Manufacturing in Russia' was held in Moscow organized by the Russian-German Chamber of Commerce, The Moscow Times newspaper and Formika GC. Representatives of major foreign and Russian manufacturing corporations, as well as official representatives for regional administrations introduced successful cases, demonstrating the current situation on import substitution processes.

The first session was opened by Mr. Michael Harms, the President of the Russian-German Chamber of Commerce, who noted that Russia achieved a great deal in recent years for production localization - most notably in the regions. “German business looks at Russia globally in this matter, regardless of the world political situation”, Mr. Harms added.
Mr Alexey Komissarov, the Director of the Industry Development Foundation, told him up: “the process of import substitution can be successfully performed by means of international partnership only”.

Following, Alexey Khodyrev,  General Director of “Russkie Stanki” corporation ('Russian Machinery') suggested that one of the crucial factors of import substitution is technology transfer that integrates interests of both Russian and foreign companies. However, when undertaking localization projects, service and quality of business processes must come in first place.
The next discussion panel - ‘Import Substitution and Export Orientation – could there be a balance?” had a great interest among attendees, moderated by Maxim Zverkov, the President of Formika GC –INNOPROM-2015 International Industrial Trade Fair official operator. 
The key issues was quite actual: state funding for manufacturing, import and export priorities and policies, facilitating localization, along with obtaining equal access to infrastructure and resources for Russian and foreign companies (especially, to small- and medium-sized enterprises).
Vadim Makhov – Chairman of the Board at The OMZ company (“United Machinery Plants”) – brought the attention of delegates to an important issue: despite government efforts, funding of Russian companies is much more costly compared to foreign corporations (due to the weak position of the Russian ruble), what causes problems with Russian manufacturers expansion to foreign markets. 

Ralph Bendish - CEO of Krasnodar-based machinery plant CLAAS JSC, shared his own experience: “We've been working in Russia more than twenty years now. It's a highly competitive market with limited resources for business development. E.G. – we faced difficulties in sourcing Russian component suppliers. This forces us to deal with foreign suppliers instead. When people ask me “are you a Russian company?”, I can't really answer.  We work here in Russia, we pay taxes, but we still don't get equal access to government support. Russian suppliers and producers – particularly the small and medium-size players – can't grow business in such conditions”.

International companies operating in Russia feel that the main goal of the Government is to develop clear standards and criteria for localization. What is a “Russian company”, and what is a”'domestically-made product'”? Experts have only a short time to prepare their answers – since the topic of Import Substitution has been publicized as one of the most important themes in the Business Program of INNOPROM-2015.
Georges Barbey, the CEO of Lanxess, commented that international corporations don't take part in the vast majority of current State purchase contests:
“International partners expect the Russian Government to play the “open game” ,  Mr. Barbey added.

Finally, panelists agreed on the most actual goals to reach success:  First, it is vital to realize the monetary industrial policies of The Russian Government. Second – all players must have an equal access to infrastructure and resources. Third – there must be a mutual integration between international and Russian standards.
“We've been able to discuss some fairly tough questions about Import Substitution and localization of production today. But the main thing, I would say, is to recognize the agenda of the Russian Ministry of Trade and Industry, in order to continue the dialogue on these burning issues at INNOPROM-2015 in Ekaterinburg”, commented Mr Maxim Zverkov.
In order to participate in the INNPROM-2015 International Industrial Trade Fair, you need to pre-register at the following link:  http://innoprom.com/en/for-participants/application/
For Press Accreditation: http://innoprom.com/en/media/mass-media-accreditation/

About the conference:
The “Import Substitution and New Manufacturing in Russia” conference was held as part of the III International Forum “Localization of production and the export potential of Russian suppliers”.
The event was organized by The Moscow Times (publishing house the Sanoma Independent Media group) in association with the Russian-German Chamber of Commerce – with the support of Formika GC, the operators of the 6th INNOPROM-2015 International Industrial Trade Fair.

INNOPROM is Russia's main International Industrial Trade Fair, which has taken place annually in Ekaterinburg since 2010. In 2014, INNOPROM presented around 600 corporations from 70 countries, with thirty international delegations coming to Ekaterinburg. Within the exhibition nineteen major contracts were concluded, worth a total of 6 billion rubles in all. The event was extensively covered in the national and regional media, with more than 300 journalists working in real-time format at the INNOPROM Press-Centre. The operators of the Trade Fair, Formika GC, predict that the number of exhibitors and partners for INNOPROM-2015 will exceed the figures for the previous year.
The general information partner for INNOPROM-2015 will be 'Interfax'. The Trade Fair also enjoys the support of major Russian media sources including Rossiyskaya Gazeta, Gazeta.ru, Russia Beyond The Headlines, and publications including BRICS, Expert, Business Russia, and Delovoy Kvartal (Business Quarter).
You can obtain further information from the INNOPROM-2015 Press Centre at pressa@innoprom.com, or from Svetlana Ilyuk (press secretary) by calling +7 963 970 8936

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